Usiminas Fires up Ambitious Syndication

Brazilian steelmaker Usiminas is readying its third foray into the syndicated loan market in a year, this time with an aggressively priced $400m IDB A/B loan, say bankers familiar with the deal. Sumitomo has been tapped to lead the $350m syndication for the 8-year B loan, thanks to an aggressive pitch to underwrite the facility at a margin as low as 75bp over Libor, say bankers away from the deal. Executives involved in the process declined to confirm the figure, but conceded pricing was in the Libor plus 75bp-100bp range. In either case, the margin is tighter than what comparable borrowers have recently sought. For example, in June, Gerdau closed a 3-year $500m facility at Libor plus 125bp. Usiminas’ syndication strategy will involve showing the loan to Japanese banks, say officials on the deal, who point to its strong ties to the country. Nippon Steel is the company’s largest shareholder. Proceeds will help build a new thermoelectric power plant. In February, Usiminas raised $1.3bn in a two-part syndicated loan via HSBC, with 5 and 7 year tenors on a trade facility paying Libor plus 110bp and 135bp respectively, as well as a 2-year liquidity facility at Libor plus 75bp. In June 2007, Usiminas raised a $300m 5-year standby facility via Calyon and HSBC at 25bp over Libor out of the box. The company has also visited the debentures market, issued cross border bonds and tapped bilateral agency funds in the past year to help finance a $14bn expansion program.